A cohort of patients with chronic type B hepatitis is being evaluated and followed to determine the long-term natural history of this common form of chronic liver disease. Selected patients nave been entered into therapeutic trials of antiviral and/or immunomodulatory agents. Efforts are now being directed towards improving the response rate to interferon alone. A pilot study of alpha and gamma interferon in combination has been completed. While alpha interferon induced a dose-dependent inhibition of viral DNA polymerase activity, gamma interferon had little or no effect on this enzyme. In addition, gamma interferon was associated with more severe side effects than alpha interferon. When used in combination, no additive or synergistic antiviral effects were apparent. Two new studies using alpha interferon as therapy for chronic type B hepatitis are underway. The first is a randomized, controlled trial to reevaluate the effects of alpha interferon alone (at a dose of 10 million units three times weekly) compared to no therapy in patients without factors that may potentially interfere with the therapeutic response. So far five patients have been entered and no results are yet available. A second study is designed for patients who have not responded to interferon alone in previous studies. In these cases, the effect of pretreatment with a 4 week course of prednisone before administration of interferon is being evaluated. It is hoped that the immunostimulatory effects of rapid withdrawal of corticosteroids, by inducing an exacerbation of hepatitis activity will tend to optimize the antiviral effects of alpha interferon. Six patients have been entered into this study so far, none has yet completed the treatment.